Business Context and Reporting Period
This Form 6-K filing by NICE-SYSTEMS LTD. (NICE) is dated April 13, 2003, and incorporates a Proxy Statement for a Special Meeting of Shareholders scheduled for May 28, 2003. The filing addresses a corporate governance matter regarding the renewal of the Company's Directors and Officers (D&O) insurance policy. The record date for shareholders entitled to vote is April 14, 2003.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, or debt levels. The only specific financial figures disclosed relate to the proposed insurance expenditure:
- Previously Approved D&O Premium Cap: $1,250,000
- Proposed Additional Premium Expenditure: $850,000
- Total Proposed Premium: $2,100,000
- Approved D&O Coverage Limit: $30,000,000
Material Changes
The primary material change described is the significant increase in the cost of D&O insurance. Management attributes this increase to a "hardening" of the global insurance market resulting from the global economic crisis. Consequently, the premium required to secure the previously approved coverage of $30,000,000 exceeds the shareholder-approved budget by $850,000.
Outlook, Risks, and Management Commentary
Management Commentary: The Board of Directors recommends a vote in favor of the additional expenditure. They state that while they succeeded in obtaining proposals for the required coverage, the market conditions have made insurance "particularly difficult to obtain" and "considerably higher cost" than in previous years.
Risks and Contingencies: The filing highlights the risk of being unable to secure necessary D&O coverage at the previously approved price point due to market volatility. Without shareholder approval of the additional $850,000, the Company may be unable to renew the policy on the terms required to protect the Company, its directors, and officers.
Important Facts for Investors to Verify
- Shareholders must vote on May 28, 2003, to approve an additional $850,000 expense for D&O insurance premiums.
- The increase in premium costs is attributed to broader global economic conditions affecting the insurance market.
- As of March 31, 2003, the Company had 15,809,162 ordinary shares outstanding.
- Major beneficial owners include Thales S.A. (approx. 14%) and Bank Leumi (approx. 6%).
- Proxies must be received at least 48 hours prior to the meeting to be effective.